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International Communications Market Report 2014
11 December 2014
Ofcom analyst briefing
1
2
Agenda Introduction and Market Overview James Thickett, Director of Research
Trends in the television and audio-visual industries Jonathan Fenn, Senior Media Analyst
Trends in telecoms Beatrix Kalmar, Senior Telecoms Analyst
Internet and web-based content Beatrix Kalmar, Senior Telecoms Analyst
Post Steven Cape, Senior Analyst
Comparative international pricing Nicholas Collins, Senior Telecoms Analyst
3
Introduction and Market overview
James Thickett, Director of Research
4
One of three Communications Markets Reports
International Communications Market Report 2014
Research Document
Publication date: 11 December 2014
5
Methodology Combination of industry data (2013 and 2014) and consumer research data (October 2014) • Industry data (18 countries)
- Telecoms and media industry data: IHS - Pricing: Teligen - Post: WIK - Other third-party sources
• Online consumer research (9 countries, >=1000 consumers in each country) to
examine the take-up and use of communications services. It focused on: - Device ownership - Use of the internet to watch AV content - Awareness and take up of 4G mobile services and superfast broadband - Main source of news - Use of, and attitudes towards, postal services
Third-party sources of data: Analysys Mason, comScore, IMRG, Eurostat, Eurodata TV Worldwide, The European Commission,
IHS, Kantar Media, Mediamétrie, The Nielsen Company, PwC, The Reuters Institute, Teligen, US Census Bureau, WIK and WARC.
6
Global communications revenues 2009 - 2013
Source: Data derived from various sources: PwC Global Entertainment and Media Outlook 2014-2018 @ www.pwc.com/outlook for television and radio revenues (both include advertising, licence fees and subscription services only), Wik Consult / Ofcom estimates for postal revenues. IHS / industry data / Ofcom for telecoms revenues, which refer to retail revenues for fixed voice, broadband and mobile services. Interpretation and manipulation of data are solely Ofcom's responsibility. Ofcom has used IMF 2013 average exchange rates in converting from local currency to GBP. Note: Postal revenues are for our 17 comparator countries only.
Communications revenues continue to rise
770 783 796 824 842
208 225 236 247 254 85 84 82 81 80 26 26 27 28 28 £1,090bn £1,119bn £1,142bn £1,179bn £1,205bn
0
200
400
600
800
1,000
1,200
1,400
2009 2010 2011 2012 2013
Radio
Post
Television
Telecoms
2.7% 2.3%
-0.6% -1.6%
3.1% 5.1%
2.1% 2.3%
2.1% 2.5%
CAGR 2009- 2013
Year- on-year growth
Revenue (£bn)
All
7
Communications sector revenues, 2013 UK ranked 5th in terms of revenue
Source: Data derived from various sources: PwC Global Entertainment and Media Outlook 2014-2018 @ www.pwc.com/outlook for radio revenues (include advertising, licence fees and satellite subscription services only), Wik Consult / Ofcom estimates for postal revenues, IHS / industry data / Ofcom for television and telecoms revenues (telecoms revenues refer to retail revenues). Interpretation and manipulation of data are solely Ofcom's responsibility. Ofcom has used IMF 2013 average exchange rates in converting from local currency to GBP. Note: Postal revenue data is not available for Nigeria
106
85
179
21
21
110
12
30
1
1
13
£129
£118
£332
0 50 100 150 200 250 300 350
CHN
JPN
USA
Revenue (£bn)
7 15
22 31
19 3
6 5
8 16 16
19 27
21 29
0.5 5
4 12
5 1
2 2
3 3
5 7
19 9
13
1 2
2
1 1
2 2
1 3
7 7
8
1 0
3 1
1
£8bn £20bn
£27bn £46bn
£26bn £4bn
£9bn £8bn
£13bn £21bn
£23bn £29bn
£56bn £38bn
£51bn
0 10 20 30 40 50 60
NGAIND
RUSBRAKORSGPPOLSWENEDESPAUSITA
GERFRA
UK
TelecomsTelevisionPostRadio
8
Trends in the television and audio-visual industries
Jonathan Fenn, Senior Media Analyst
Global TV industry revenues by source
£102bn £109bn £116bn £122bn £127bn
£23bn £23bn £24bn £24bn £24bn
£84bn £93bn £97bn £101bn £103bn
0%
20%
40%
60%
80%
100%
2009 2010 2011 2012 2013
All
9
% of revenues
YOY CAGR (4yr)
1.9% 5.3%
1.6% 1.5%
4.4% 5.7%
3.1% 5.1%
£254bn £236bn £225bn £246bn £208bn
Advertising
Public TV license fees
Subscriptions
Source: Data derived from PwC Global Entertainment and Media Outlook: 2014-2018
Global TV revenues up 3.1% YOY
Source: IHS / industry data / Ofcom.
5.2 5.9 7.2
8.7 10.5
12.1
2.8 2.4 2.8 3.3 3.8 4.3 2.6 2.9 3.4 4.0 4.3 5.0
9.9 10.9
13.2
15.3
17.6
20.6
0
2
4
6
8
10
12
14
16
18
20
2008 2009 2010 2011 2012 2013
BRA
RUS
IND
CHN
13.6%
15.0%
15.8%
YOY CAGR (5 yr)
Growth (%) £21bn £22bn £27bn Total revenues (£bn)
18.4%
9.1%
13.6%
15.9% 15.5%
£32bn £37bn £42bn
16.6% 15.7%
TV industry revenues among BRIC countries
Increase in global revenues driven by BRICs
TV industry revenues among European countries
Source: IHS / industry data / Ofcom.
11.4 11.9 13.0 13.1 13.0 13.4
7.5 7.6 8.1 8.6 8.8 8.8
16.5 16.8 17.4 17.8
18.5 18.9
7.2 7.0 7.5 7.5
7.0 6.7 4.5 3.8 3.9 3.5 3.2 3.0
2.3 2.3 2.5 2.6 2.6 2.6
1.6 1.5 1.6 1.8 1.9 1.9 0
2
4
6
8
10
12
14
16
18
20
2008 2009 2010 2011 2012 2013
UK
FRA
GER
ITA
ESP
NED
SWE
POL
3.4%
2.5%
0.4%
-4.5%
2.0%
-1.3%
0.8%
1.5%
-6.2%
YOY CAGR (5 yr)
Growth (%) £53bn £53bn £56bn £57bn
Total revenues (£bn) 1.7%
3.3%
3.3%
2.7%
-1.5%
-7.9%
3.2%
3.9%
3.7%
£57bn £58bn
Europe recorded more modest growth YoY
12
Online TV and video revenue for selected ICMR countries
Source: IHS / industry data / Ofcom.
55 23 47
97 109 56 78
185 201
112 117
261 272
187 162
387 421
261 227
510
648
339 320
574
0
100
200
300
400
500
600
700
UK France Germany Japan
2008 2009 2010 2011 2012 2013
Online TV video revenue (£m)
0.7 1.0
1.4
2.4
3.9
5.1
0
1
2
3
4
5
6
United States
Online TV video revenue (£bn)
Rapid increase in online TV revenue
Take-up of pay TV varies by country
13
53%
76%
57%
33%
84% 70%
29% 22%
98% 84% 84%
63%
94%
31%
68%
99%
61%
18%
47%
24%
43%
67%
16% 30%
71% 78%
16% 16%
37%
6%
69%
32% 39%
82%
0%
20%
40%
60%
80%
100%
UK FRA GER ITA USA JPN AUS ESP NED SWE POL SGP KOR BRA RUS IND CHN NGA
Free TVPay TV
Source: IHS/ industry data/ Ofcom
Take up of pay and free-to-air television: 2013 Proportion of TV Households
YoY pp change in pay TV households
+1 +4 0 0 -1 +1 +2 -2 0 1 -3 0 +2 +3 +6 0 +3 +5
UK consumers more likely to watch TV online…
14
Source: Ofcom consumer research October 2014. Base: All respondents
Weekly access of TV content over the internet
32%
26%
20%
30% 29%
19%
26% 27%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
UK FRA GER ITA USA JPN AUS ESP
All respondents
…driven by free catch up services
15
Source: Ofcom consumer research October 2014. Base: all who had ever watched TV or films online
Use of free-to-access broadcaster catch-up TV services All who had ever watched TV or films online
48% 36%
16% 31% 26%
15%
34% 19%
26%
25%
15%
28% 21%
10%
26%
21%
17%
20%
14%
18%
22%
8%
21%
16%
92%
81%
45%
78% 69%
32%
80%
57%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
UK FRA GER ITA USA JPN AUS ESP
Year
Month
Week
Within the last:
…and growing popularity of SVoD services
16
Source: Ofcom consumer research October 2014. Base: all who had ever watched TV or films online
Use of subscription video-on-demand services All who had ever watched TV or films online
22% 11% 10% 11%
38%
11% 9% 8%
8%
9% 11% 11%
14%
6% 7% 9%
12%
6% 10% 9%
11%
5% 11% 12%
42%
26% 31% 31%
63%
23% 27% 29%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
UK FRA GER ITA USA JPN AUS ESP
Year
Month
Week
Within the last:
Increase in VoD enabled devices
17
22%
12%
26% 25%
14% 16%
27%
21%
0%5%
10%15%20%25%30%35%40%45%50%
UK FRA GER ITA USA JPN AUS ESP
All respondents – take-up
Source: Ofcom consumer research October 2014. Base: All respondents
Household ownership of smart TV sets
84% 65% 71% 84% 70% 71% 56% 79% % connected & used Internet connection on smart TV
UK personally use a tablet = 35% UK personally use a smartphone = 63%
18
Daily TV viewing per head, 2012 - 2013
Source: Médiamétrie, Eurodata TV Worldwide. Note: Figures include timeshifted viewing via PVR.
Change in minutes of viewing per person per day, 2012 - 2013
232 226 221
261 293
265
201
244
195
159
247
196 217
239
159
0
50
100
150
200
250
300
UK FRA GER ITA USA JPN AUS ESP NED SWE POL KOR BRA RUS CHN
-3.7% -1.7% -0.5% 1.6% 0.0% -0.7% 0.0% -0.8% -0.5% -3.0% 1.6% 0.5% -2.5% 0.4% -3.0%
Min
utes
per
per
son
per d
ay
2013 average 224 mins
Live TV down or unchanged in 11 out of 15 ICMR countries
19
Internet and web-based content
Beatrix Kalmar, Senior Telecoms Analyst
23
14 16
8
15 13 14 9
18 20
11
2
16
40
28 25 24
27
19
30
21
35 32 27
11
29
0
10
20
30
40
UK FRA GER ITA USA JPN AUS ESP NED SWE POL SGP KOR
2008
2013
40% of all UK advertising spend is online
20
Source: Warc data (www.warc.com)
Internet share of total advertising spend Per cent
18 14 10 15 12 6 15 12 16 13 15 9 12 5 year PP change
Fixed internet advertising continues to grow
21
80
38 51
19
73
37
98
16
63
85
11 17 33
5 10 0 6 0
0
20
40
60
80
100
120
UK FRA GER ITA USA JPN AUS ESP NED SWE POL SGP KOR BRA RUS IND CHN NGA
Source: Ofcom analysis based on data from PwC Global Entertainment and Media Outlook 2014-2018 @ pwc.com/outlook. Interpretation and manipulation of data are solely Ofcom’s responsibility. Population figures from Ofcom/IHS
Fixed internet advertising expenditure per head, 2013
Internet advertising spend per head (GBP)
7 13 9 10 7 7 18 7 7 18 10 15 14 23 26 27 30 28 YoY
change (%)
Significant growth in mobile advertising
22
15.90
0.85 2.23
1.37
14.51
7.72 8.52
0.54 0.54
3.26
0.05 2.09
9.11
0.04 0.29 0.00 0.72 0.07 0
5
10
15
UK FRA GER ITA USA JPN AUS ESP NED SWE POL SGP KOR BRA RUS IND CHN NGA
Source: Ofcom analysis based on data from PwC Global Entertainment and Media Outlook 2014-2018 @ pwc.com/outlook. Interpretation and manipulation of data are solely Ofcom’s responsibility. Population figures from Ofcom/IHS
Mobile advertising expenditure per head, 2013
Mobile advertising spend per head (GBP)
96 33 65 22 109 22 296 20 17 26 20 25 24 34 46 61 42 44 YoY
change (%)
50%+ of internet users have a smartphone
23
63
35
57
31
62
29
76
43 50
31
77
23
69
38
77
45
0102030405060708090
Smartphones Tablets
UKFRAGERITAUSAJPNAUSESP
Source: Ofcom consumer research October 2014
Use of smartphones and tablets Proportion of respondents (%)
Social networking and reading news online are the most popular internet activities
24
25
10
21 23 29 28 30
14
34 25
18
28 37
21
50
31
44 47 50 58
42
58
40 46
64 59 56
74
64
47
65 71
17 20 15
28 29
19 23 22
18 16 17 26
21 21 21 22
0
20
40
60
80
100
UK FRA GER ITA USA JPN AUS ESP
Online shopping Online banking Reading news online Social networking Playing games with other players Using ‘cloud’ service
Source: Ofcom consumer research October 2014
Mobile-internet activities All respondents who access internet with a mobile phone/ smartphone (%)
25
Trends in telecoms
Beatrix Kalmar, Senior Telecoms Analyst
148 136 130 119 109 100
65 73 81 88 97 106
256 252 250 248 242 232
79 93 110 130 154 175 548 555 571 585 603 613
0
200
400
600
2008 2009 2010 2011 2012 2013Mobile Data Mobile VoiceFixed Broadband Fixed Voice
26
Total comparator country retail telecoms revenue
Source: IHS / industry data / Ofcom
154 149 146 143 137 129
156 158 166 169 179 179
116 115 117 118 120 124
122 132 142 154 166 181 548 555 571 585 603 613
2008 2009 2010 2011 2012 2013BRIC & Nigeria Asia Pacific USA EU
£bn
Total telecoms revenues increased in 2013
27
Telecoms service retail revenues, by sector
Source: IHS / industry data / Ofcom
The US and China contributed almost half of the total retail telecoms revenue in 2013
9 4 7 5 29 13 3 3 2 1 1 0 2 9 4 2 4 0
16 14 16 12
121
50
9 10 5 3 4 2 12 16 15 12
84
7 4 2 3 2
29
23
4 3 1 1 1 1 4
6 2 1
18
0
29 21 27 19
179
85
16 16 8 5 6 3 19
31 22 15
106
7 0
50
100
150
200
UK FRA GER ITA USA JPN AUS ESP NED SWE POL SGP KOR BRA RUS IND CHN NGA
Fixed
Mobile
Fixedbroadband
£bn
0.0 -5.4 -2.2 -6.1 2.8 1.6 1.0 -8.1 1.4 2.3 -2.2 3.8 0.5 4.1 5.2 8.3 9.9 11.0 5 year CAGR (%)
28
Figure 6.46
Fixed voice connections per 100 population
55
52
41
24 42
29
35
31 46
27
38
24
48
41
43
35
27
12
48
25
24
15 35
29
46
36
20
19 32
28
3 2
26
20
4 7 23
36
5 16
4 5
7 15
8 20
2
3 2 6 18
31
8 16
2
3 3 8
3 19
1 3 0 1
1
59
59 64
60
47
45
39
37
53
42
46
45 50
44
44
41
44
43
56
41
26
18
39
36
50 55
21
22
32
29
3 2 26
20
1 0
0
20
40
60
80
2008
2013
2008
2013
2008
2013
2008
2013
2008
2013
2008
2013
2008
2013
2008
2013
2008
2013
2008
2013
2008
2013
2008
2013
2008
2013
2008
2013
2008
2013
2008
2013
2008
2013
2008
2013
ManagedVoIPconnections
PSTN lines
Source: IHS / industry data / Ofcom
Connections per 100 people
UK FRA GER ITA USA JPN AUS ESP NED SWE POL SGP KOR BRA RUS IND CHN NGA
PSTN lines fall while managed VoIP connections grow
78 72
83
71
50
68 69
82
40
60 66
81
62
47 41
52
75
27
0
20
40
60
80
100
UK FRA GER ITA USA JPN AUS ESP CHN
Landline athome
Regularly usea landline
29
Household take-up and personal use of fixed telephony services
Source: Ofcom research, September 2014
Proportion of respondents (%)
-18 -6 -2 -9 -3 -27 -17 -7 -13 Percentage point difference
Eighteen per cent of UK adults have a fixed line at home but are not regular users
17
18
23
12
74
30
5 9 6 3 5 1
16
10
9 6
85
0
23
25
28
14
92
44
6 12
7 3 8 2
18
20
26
16
198
0
0
50
100
150
200
UK FRA GER ITA USA JPN AUS ESP NED SWE POL SGP KOR BRA RUS IND CHN NGA
2008
2013
30
Fixed broadband connections
Source: IHS / industry data / Ofcom
Fixed broadband continues to grow
Connections (millions)
5.6 6.7 4.4 3.7 4.4 8.1 4.5 6.7 2.8 2.2 10.7 10.3 3.3 14.8 24.1 24.3 18.3 -26.0 5 year CAGR
(%)
2 2 2 2 2
12
1 1 4 4
1
5
18
0 0 0 0 0
11
10
9 6
15
27
8 7
15
24
4
20
43
2 3
0 2
0
0
10
20
30
40
50
UK FRA GER ITA USA JPN AUS ESP NED SWE POL SGP KOR BRA RUS IND CHN NGA
2008
2013
31
Average monthly fixed broadband data volume per person
Source: IHS / industry data / Ofcom
Fixed broadband data usage increases
GB per month
39 36 33 32 49 17 45 38 33 44 48 30 18 98 50 84 78 -2 5 year CAGR
(%)
24
9 16
1
33
75
17 17
42 38 39
81 86
9
45
3 13
0
20
40
60
80
100
UK FRA GER ITA USA JPN AUS ESP NED SWE POL SGP KOR BRA RUS IND CHN
32
Fixed broadband connections 30Mbit/s or higher, end 2013
Source: IHS / Ofcom / operator data
Proportion of connections (%)
High speed broadband is on the rise
10 2 4 -4 23 7 3 7 7 9 15 3 4 2 5 1 4 YoY pp change
100
100
99
100
100
100
99
100
100
100
100
100
100
100
93
87 99
96 99
100
92 97
99
100
99
99
99
100
98
100
100
91
76
26
80
55 63
68
81
39
97
82
85
47
90 99
66
100
100
32 36
1 1
9
0
20
40
60
80
100
120
UK FRA GER ITA USA JPN AUS ESP NED SWE POL SGP KOR BRA RUS IND CHN NGA
2G
3G
4G
33
2G, 3G and LTE mobile network availability: end 2013
Source: IHS / industry data / Ofcom
South Korea and Singapore have the highest 4G availability
Population coverage (per cent)
256 252 250 248 242 232
31 34 37 41 42 40
48 60 73 89 113 135 335 345 360 377 396 407
0
100
200
300
400
2008 2009 2010 2011 2012 2013
£bn
Total
Mobile internet
Messaging
Voice
34
Total comparator country retail mobile telecoms revenue, by service
Source: IHS / industry data / Ofcom
5 year CAGR
Annual growth
2.7% 4.0%
19.7% 23.0%
-4.0% 5.5%
-4.1% -2.0%
Total mobile revenues continue to grow, with data services the main factor
6.29
88
46
36
19
86
39
21
15
85
37
31
14
92
61 64
37
72
42
29
18
50
63
23
22
90
46
41
17
72
55 66
32
79
49
79
32
0
20
40
60
80
100
SMS Email Instant Messaging Twitter
UKFRAGERITAUSAJPNAUSESPCHN
35
Use of data services on mobile phones
Source: Ofcom research, October 2014
Proportion of mobile users (%)
Smartphones help push mobile data services
149
119
135 35
4
363 64
5
537
172 30
8
1,51
2
190 34
0
788
90
63
6 31
54 25
1
192
271 46
9 794 1,
101
763
239 42
1
2,30
5
261 43
9
1,36
9
102
135
8 58
65
0
500
1000
1500
2000
2500
UK FRA GER ITA USA JPN AUS ESP NED SWE POL SGP KOR BRA RUS IND CHN NGA
2012
2013
36
Average per-capita monthly mobile data use
Source: IHS / industry data / Ofcom
Mobile data usage increases
MB per month
68 62 100 33 118 71 42 40 37 53 37 29 74 14 114 26 87 20 Y0Y
change (%)
17
6
52
17
89
60
53
0 0
93
50
100
100
1
25
1 0 0
63 68
81
39
97
82
85
47
90 99
66
100
100
32 36
1 1
9
0
20
40
60
80
100
120
UK FRA GER ITA USA JPN AUS ESP NED SWE POL SGP KOR BRA RUS IND CHN NGA
2012
2013
37
4G population coverage (%) by country
Source: IHS
4G mobile coverage increased in most comparator countries
Population coverage (per cent)
46 62 29 22 8 22 32 47 90 6 16 0 0 31 11 0 1 9 5 year
PP change
4 4 5 3
23 22 20
3 4
11
2
24
51
0 1 0 0 0 0
10
20
30
40
50
UK FRA GER ITA USA JPN AUS ESP NED SWE POL SGP KOR BRA RUS IND CHN NGA
38
4G as a proportion of total mobile subscriptions: end 2013
Source: IHS
Asia Pacific countries and the US have the highest proportion of 4G connections
Proportion of mobile connections (%)
39
Comparative international pricing
Nick Collins, Senior Telecoms Analyst
40
Price benchmarking methodology
• We compare UK prices to those in the other EU5 countries and the US
• Pricing model developed by Teligen
• Includes tariffs from the largest providers of each service (over 6,000 in 2014)
• Takes connection fees, hardware costs and promotional discounts into
account
• Construct five household usage profiles and consider the minimum price
required to fulfil these requirements
41
Summary of households usage profiles used in the analysis
Source: Ofcom
‘Typical household type’ Fixed voice Mobile
voice Mobile
messaging
Mobile handset
data
Fixed line broadband
Mobile broadband Television
1 A low use
household with basic needs
Low use Low use None None None None Free-to-air
2 A broadband
household with basic needs
Medium use Low use Low use Low use Low use None Free-to-
air
3 A mobile ‘power user’ None High use High use High use None High use
Basic pay-TV
with PVR
4 A family household with multiple needs High use Medium
use High use Medium use High use None
Basic pay-TV
with HD & PVR
5 An affluent two person household Low use High use Medium
use Medium
use
Medium use
>30Mbit/s None
Premium pay-TV
with HD & PVR
42
Source: Teligen
Household requirement Fixed voice Mobile Television
Multi-play offer
Single services
Multi-play offer
Single services
Multi-play offer
Single services Multi-play offer
Single services
Television
Multi-play fixed voice & broadband
Triple-play fixed voice, fixed broadband &
Single mobile tariff Single TV service
Single mobile tariff
Single mobile tariff Single broadband
bundled TV service
bundled TV service Multi-play landline &
Quad-play fixed voice, fixed broadband, mobile and TV service
Examples of combinations of multi-play and single service offers
Fixed b/band
43
UK stand-alone fixed voice prices increased by 6% in 2014
Comparative stand-alone ‘weighted average’ fixed-line voice pricing
Source: Ofcom, using data supplied by Teligen
21 22 24 27 27 27 23 25 25 25 22 25
23 24 29 32 30 31 26 28 28 28 26 28 24 25
33 36 32 32 27 30 30 31 28 30
20 21 21
23 23 23 21
23 22 21 20
22
0
20
40
60
80
100
120
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
Household 5
Household 4
Household 2
Household 1
UK GER FRA ESP ITA USA
Monthly cost (£)
+6% +10% +1% +9% -1% +10% Annual change
44
UK weighted average mobile prices fell by 2% in 2014 Comparative stand-alone ‘weighted average’ mobile pricing
Source: Ofcom, using data supplied by Teligen
10 9
8 7
10 8
9 10
13 12
25 24
10 9
8 8
14 14
10 13
17 14
30 28
15 15
18 16
29 30
15 23
28 28
56 39
18 17
20 20
34 37
15 21
32 26
57 41
25 20
0 18
16 0
36 41
0 15
25 0
24 27
0 53
39
31 33
0 34
36 0
49 50
0 43
45 0
49 50
0 68
67
41 45
0 40 42
0 60 60
0 53
52 0
56 56
0 73
72
51 48
0 38 42
0 89 74
0 63
60 0
71 67
0 73
86
0 100 200 300 400 500
20132014
20132014
20132014
20132014
20132014
20132014
Connection 1
Connection 2
Connection 3
Connection 4
Connection 5
Connection 6
Connection 7
Connection 8
UK
GER
FRA
ESP
ITA
USA
Monthly cost (£)
-2%
+1%
-3%
+12%
-3%
-9%
45
The UK has the cheapest ‘lowest available’ stand-alone fixed broadband prices in 2014 Comparative stand-alone ‘lowest available’ fixed-line broadband pricing
Source: Ofcom, using data supplied by Teligen Note: 1In France Household 5 includes a lower speed connection in 2013, so figures are not directly comparable
8 11 15 17 16 17 13 21 22 30 18 27 8
12 15 17 16 17 22
24 22 30
24 27
18 16
15 36
20 22 22 24
44 30
37 34
0
20
40
60
80
100
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
Household 5
Household 4
Household 2
UK GER FRA1 ESP ITA USA
Monthly cost (£)
+17% +9% +6% +24% +4% +12%
6 7 7 9 15 12 6 5 4 11 26
12 15 15 12 13
19 20 8 5
28 24
27
20 15 16 16 15
19 20
11 13
28 30
35
29
0
20
40
60
80
100
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
5GB permonth
3GB permonth
1GB permonth
46
The UK had the third-lowest prices for mobile broadband services Comparative stand-alone ‘lowest available’ mobile broadband pricing
Source: Ofcom, using data supplied by Teligen
UK GER FRA ESP ITA USA
Monthly cost (£)
+6% +7% +1% -9% +11% -32%
47
The UK was second most expensive for premium pay-TV services in 2014 Comparative stand-alone TV pricing
Source: Ofcom, using data supplied by Teligen
16 17 20 23 20 16 12 11 28 31 24 17
16 17 20 23 20 22 12 11
28 31 24
17
66 63 35
40 27 30
40 38
49 53
47 65
12 12
9 10
16 17 8 9
0
20
40
60
80
100
120
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
Licence fee
Premium pay-TVwith HD & PVR
Basic pay-TV withHD & PVR
Basic pay-TV withPVR
UK GER FRA ESP ITA USA
Monthly cost (£)
-1% +14% +1% -6% +9% +3%
The UK had the lowest ‘weighted average’ stand-alone prices for four baskets in 2014...
48
Summary of stand-alone ‘weighted average, basket pricing
40
42
44
46
49 75
61
69 94
79
87
112
81
81 13
0 91
128 15
3
150 17
4 26
1 20
7 223
286
172
168 21
6 17
8 18
7 27
5
0
100
200
300
UK
FRA
GE
RIT
AE
SP
US
A
UK
FRA
GE
RIT
AE
SP
US
A
UK
FRA
GE
RIT
AE
SP
US
A
UK
FRA
GE
RIT
AE
SP
US
A
UK
FRA
GE
RIT
AE
SP
US
A
TV (excl.TV licence)MobilebroadbandMobile
FixedbroadbandFixed voice
Monthly cost (£)
Source: Ofcom, using data supplied by Teligen
Basic needs Late adopter
Mobile power user
Connected family
Sophisticated couple
1 1 1 1 2 UK rank
...but performed less well in terms of and the lowest available prices for three baskets
49
Summary of ‘lowest available’ basket prices
28
30
26
25
21 44
40
33 47
41
50
87
69
60
101
75 10
6 118
96
80
131
116 13
2 21
8
121
108 12
6 10
3 14
3 21
4
0
50
100
150
200
250
UK
FRA
GE
RIT
AE
SP
US
A
UK
FRA
GE
RIT
AE
SP
US
A
UK
FRA
GE
RIT
AE
SP
US
A
UK
FRA
GE
RIT
AE
SP
US
A
UK
FRA
GE
RIT
AE
SP
US
A
TVhardwareMobilebroadbandMobile
FixedbroadbandFixed voice
Bundle
Monthly cost (£)
Source: Ofcom, using data supplied by Teligen
Basic needs Late adopter Mobile power user
Connected family
Sophisticated couple
4 2 2 2 3 UK rank
50
Comparison of international household profile pricing, 2014
The UK performed worst for the highest and lowest use households
Source: Ofcom, using data supplied by Teligen
‘Basic needs’ household
‘Late adopters’ household
‘Mobile power user’ household
‘Connected family’ household
‘Sophisticated couple’ household
Price (£ per month)
‘Weighted average’
‘Lowest available’
‘Weighted average’
‘Lowest available’
‘Weighted average’
‘Lowest available’
‘Weighted average’
‘Lowest available’
‘Weighted average’
‘Lowest available’
UK 40 28 61 40 81 69 150 96 172 121
FRA 42 30 69 33 81 60 174 80 168 108
GER 44 26 94 47 130 101 261 131 216 126
ITA 46 25 79 41 91 75 207 116 178 103
ESP 49 21 87 50 128 106 223 132 187 143
US 75 44 112 87 153 118 286 218 275 214
51
The UK’s average rank was unchanged in 2014, but France has caught up
Average pricing rankings, by country: 2013 and 2014
Source: Ofcom, using data supplied by Teligen
2014 rank Country Average
rank 2013 Average
rank 2014
1= UK 1.9 1.9
1= FRA 2.4 1.9
3 ITA 2.0 2.8
4= GER 4.0 4.2
4= ESP 4.8 4.2
6 USA 5.9 6.0
52
Steven Cape, Senior Analyst, Market Intelligence
53
44 bn 43 bn 44 bn 45 bn 45 bn 44 bn 32 bn 31 bn 30 bn 30 bn 29 bn 28 bn
198 bn 172 bn 167 bn 164 bn 155 bn 153 bn
79 bn 73 bn 71 bn 69 bn 65 bn 62 bn
353 bn 320 bn 313 bn 308 bn 295 bn 288 bn
0
50
100
150
200
250
300
350
400
2008 2009 2010 2011 2012 2013
Europe
USA
Asia Pacific
BRIC
Volume (billions)
Source: WIK / Ofcom analysis
Mail volumes across our comparator countries have declined by 18.6% since 2008
54
Revenues have fallen as well, but not at the same rate
Source: WIK / Ofcom analysis
Revenue (£bn)
4 bn 4 bn 4 bn 4 bn 5 bn 5 bn 15 bn 15 bn 15 bn 15 bn 15 bn 15 bn
38 bn 34 bn 33 bn 32 bn 30 bn 30 bn
34 bn 33 bn 32 bn 32 bn 31 bn 31 bn
92 bn 85 bn 84 bn 82 bn 81 bn 80 bn
0
25
50
75
100
2008 2009 2010 2011 2012 2013
Europe
USA
Asia Pacific
BRIC
55
(2010=1)
Source: WIK / Ofcom analysis. Note: Figures are nominal. Standard letter is a C5 envelope, 229x162x5 <=100g .
Price increases are one reason for this...
Change in First Class equivalent stamp price since 2010
1.51 1.45 1.40
1.18
0.98 0.90
1.00
1.10
1.20
1.30
1.40
1.50
1.60
2010 2011 2012 2013 2014
UKNEDITAFRAUSAESPBRAPOL
...increased packet and parcel volume is another
56
Source: WIK / Ofcom analysis
Increase in packet and parcel volume since 2008 Parcel volume growth (2008=1)
Parcel
volume per capita
8.6
11.9
27.7
32.4
72.8
36.5
1.46
1.35
1.23 1.19 1.13
1.04
0.8
0.9
1
1.1
1.2
1.3
1.4
1.5
2008 2009 2010 2011 2012 2013
SWE
NED
UK
GER
JPN
USA
People in the UK spend the most online
57
Source: European B2C e-commerce report 2014, Ecommerce Europe
Value of B2C e-commerce per head 2013 (£)
1,968
918 909
218
1,171
844
1,356
361
743
1,060
161 363
128
£0
£500
£1,000
£1,500
£2,000
UK FRA GER ITA USA JPN AUS ESP NED SWE POL KOR RUS
And online shoppers are far more likely to send and receive parcels
58
Proportion of respondents who have received a parcel in the past week (%)
60% 59% 61% 54% 51%
61% 57% 55%
35% 36% 34% 27% 28%
34% 33%
22%
0%
20%
40%
60%
UK FRA GER ITA USA JPN AUS ESP
Weekly online shoppers Not weekly online Shoppers
Source: Ofcom research
Consumers reliance on post remains high
59
Proportion of consumers stating reliance on post (%)
26
62
19
53
59
52
52
56
0 10 20 30 40 50 60 70
ESP
AUS
JPN
USA
ITA
GER
FRA
UK
Source: Ofcom research
60
Questions?
